Social Security's 2027 COLA Is Set for a Double Dose of History

Making history and surpassing milestones is commonplace for America's leading retirement program, Social Security. Last year, Social Security celebrated its 90th anniversary, and the average monthly retired-worker benefit topped $2,000 for the first time.

In 2027, some of the more than 71 million people currently receiving a traditional Social Security benefit appear set for a double dose of history, courtesy of the program's cost-of-living adjustment (COLA). Social Security's COLA is essentially an annual raise given to beneficiaries to offset the effects of inflation (rising prices).

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Social Security's projected "Trump bump" will make history in a nontraditional way

In 2026, beneficiaries received a 2.8% boost to their monthly payout. While much of this increase was based on normal inflationary factors, it was also partially influenced by President Donald Trump's policies.

In early April 2025, Trump unveiled his tariff and trade policies, which included a sweeping global tariff and higher reciprocal tariffs for countries deemed to have adverse trade imbalances with America. Even though the U.S. Supreme Court invalidated many of these tariffs in a February 2026 ruling, the inflationary effects they had on select imported goods lifted the prevailing U.S. inflation rate last year. This "Trump bump" meant Social Security beneficiaries received a slightly beefier raise this year.

For a second consecutive year, Social Security recipients are in line for a Trump bump, albeit for an entirely different reason. While the price stickiness associated with tariffs on the goods sector hasn't completely dissipated, it's inflation driven by the Iran war that's set to boost payouts in 2027.

Nearly five months ago, on Feb. 28, the president ordered the U.S. military to attack Iran, prompting the latter to shut down the Strait of Hormuz to virtually all maritime traffic. This move effectively halted the flow of a fifth of the world's liquid petroleum demand and sent fuel prices soaring. Given that COLA is representative of U.S. inflation, higher fuel prices are pointing to a sizable Trump bump in 2027.

BREAKING: June CPI inflation falls to 3.5%, below expectations of 3.8%

Core CPI inflation falls to 2.6%, below expectations of 2.8%.

Month-over-month CPI inflation fell -0.4%, the biggest monthly drop since May 2020.

US stock market futures are surging on the news.

-- The Kobeissi Letter (@KobeissiLetter) July 14, 2026

On the one hand, the latest independent estimates suggest that Social Security's 2027 COLA has moderated a bit. After trailing 12-month inflation hit a three-year high of 4.2% in May, nonpartisan senior advocacy group, The Senior Citizens League (TSCL), forecast a 3.9% COLA for 2027. Meanwhile, independent Social Security and Medicare policy analyst Mary Johnson was projecting a 4.7% raise for the upcoming year.

Following the June inflation report, TSCL's 2027 cost-of-living adjustment estimate has backed off slightly to 3.8%, while Johnson's prognostication is now 3.7%. Next year's Trump bump is no longer pacing the fourth-largest over the last 36 years -- but a history-making moment is still in the cards.

If Social Security's 2027 COLA is remotely in the ballpark of TSCL's and Johnson's respective estimates, it would mark the sixth consecutive year that beneficiaries would receive a raise of at least 2.5%. The last time benefits increased by at least 2.5% for six straight years was 30 years ago, when COLAs ranged between 2.6% and 5.4% from 1988 through 1997.

Consistently above-average COLAs have been a rarity since the start of this century.

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Select retirees can expect a historic consolation prize

But a sixth straight year with an above-average raise is just one way independent estimates are forecasting a historic COLA in 2027. Select retired workers are also on track to receive a welcome consolation prize.

Tens of millions of retired-worker beneficiaries are enrolled in Medicare. Traditional Medicare typically encompasses Part A (inpatient hospital stays), Part B (outpatient services), and Part D (prescription drugs). For the roughly 99% of workers who've earned at least 40 lifetime work credits, there is no monthly premium for Part A. However, Part B has a standard monthly premium ($202.90 in 2026), which may be subject to surcharges for those with higher incomes.

Medicare's Part B premium is typically deducted from a retired worker's monthly Social Security benefit.

While this probably comes as no surprise, monthly Part B premiums have been consistently rising at a much faster pace than Social Security's cost-of-living adjustments on an annual basis. From 2024 through 2026, retired workers saw their benefits climb by 3.2% (2024), 2.5% (2025), and 2.8% (2026), respectively. In comparison, Medicare's Part B premium jumped by 5.9% (2024), 5.9% (2025), and 9.7% (2026).

BREAKING: 71 million Social Security beneficiaries will see a 2.8% cost-of-living adjustment (COLA) beginning in January 2026. The average annual increase over the last decade: 3.1%.https://t.co/l5IYmkf6Ih pic.twitter.com/pgqtPLgqMB

-- Charlie Bilello (@charliebilello) October 24, 2025

This trend, which has persisted throughout most of this century, can offset the entire COLA for lifetime low earners and partially offset the annual raise for others.

But according to initial estimates from the latest Medicare Trustees Report, the standard Part B premium is forecast to rise from $202.90/month to $209.50/month in 2027. On a percentage basis, this works out to a 3.25% increase.

Based on estimates from TSCL and Mary Johnson, Social Security's 2027 COLA should land between 3.7% and 3.8%. If accurate, it would mark an ultra-rare occasion in which Social Security's COLA is rising by a higher percentage than Medicare's monthly Part B premium.

A July 2024-published analysis by TSCL compared the price changes of the most commonly purchased goods and services by seniors to the aggregate COLAs they received from 2010 to 2024. TSCL's report estimated that the buying power of a Social Security dollar had shrunk by 20% over this time frame.

The latest estimates suggest that retirees enrolled in traditional Medicare may ever-so-slightly claw back some of this loss of buying power in the upcoming year.

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